As a wonky new Austinite I was delighted to discover the blog Keep Austin Wonky, and even more pleased to read this post about nonprofit capacity building. The author Julio Gonzalez Altamirano cites this entry from another cool Austin blog, Social Velocity, where the author Nell Edgington writes
“I met with a nonprofit Development Director earlier this month who has had a really hard time convincing their CEO and board to let them spend money on a donor database and some fundraising materials. Yet, at the same time the Development Director is expected to raise millions of dollars in revenue. That sounds completely crazy, doesn’t it? But in the world in which I work that is often the rule rather than the exception. Infrastructure, capacity, fundraising, marketing, and operations dollars are somehow bad, dirty, not necessary, dismissed.”
As a former development director and fundraising consultant, I’m familiar with nonprofit investments in marketing materials and donor databases.
In fact, I’ve persuaded many nonprofits to increase their investments in these areas, so I’d like to offer a few tips on how to do it. These principles apply whether you’re a trustee, a donor, a vendor, a staffer, or a volunteer. Here goes:
Realize that you’re negotiating with the trustees
Whether you’re trying to persuade the CEO, a development director, or anyone else on staff to increase their investment, you need to know that you’re really negotiating with the nonprofit’s trustees. If the trustees want it, you’ll get it, and if the trustees don’t, you won’t, period.
And if the CEO is empowered to make the investment decision without explicit trustee input, she is still going to spend a large amount of time thinking about the trustees’ wishes. CEOs that spend money in ways that displease their trustees are not long of this world.
So you need to see the nonprofit from the perspective of the trustees, and you need to speak to the motives of the trustees, even if you’re dealing with someone below them in the organizational hierarchy.
Empathize with the trustees
Nonprofit professionals find it tempting to slap their foreheads in exasperation and ask, “Why don’t those trustees get it?” This is a natural but not terribly productive response, and chances are the trustees are asking themselves the same question about the staffers, vendors, and volunteers.
Good salespeople are incredibly empathetic, and their first reaction to hearing “no” is not to complain about how stupid their prospects are. Good salespeople see their prospect’s reluctance to buy as a rational response given their prospect’s worldview and desires. The problem is that the worldview needs to be changed.
To begin to change someone else’s worldview, start by getting a profound understanding of where they’re coming from. Only from there can you pave the path to the worldview you take to be better.
Understanding your trustees’ worldview and coming up with good reasons to invest in light of that worldview is a subtle task. If you’re good at it, your reasons will be overwhelming.
Take responsibility for the results
Trustees don’t want to hear that you believe that the nonprofit falls woefully short of fulfilling industry best practices. What do they care what you think other people consider to be standard practice?
Instead, they want you to stick your neck out and put real numbers to your beliefs about how you think the investment will affect the nonprofit. Do you think your investment will bring the nonprofit more money? Then state how and why, exactly. Make a thorough business case and stake your personal credibility on it. You do want them to make the investment, don’t you?
As a consultant, I know all-too-well that a sales strategy that relies on awareness-raising alone won’t work. If I want the trustees to make the investment, I have to own the results.
So before I ever even give a specific fundraising marketing proposal to nonprofits, I look at their data. The data will tell me how effective they are at raising funds and where they’re ignoring opportunities.
And I’ve certainly found nonprofits that were performing at such a high level that I couldn’t see where my help would increase their revenue. Nonprofit professionals are surprised to hear a consultant say, “You’re doing great, keep it up, I can’t help you.” But it’s better to avoid the business than to take on a project with a high probability of failure.
Once you have a full picture of how the nonprofit functions, you need to generate estimates for the real payoffs of the investments you propose. How much money do you think they’ll add to the bottom line, and how quickly?
Nothing shows trustees that you are serious like putting forward-looking income projections on paper and taking public responsibility for the actual outcomes. Sure, it’s easier just to cite what you take to be widely accepted standards (“Everyone does fundraising letters, how can you not?!?”), but you’re a lot more likely to get their attention if you have your own (metaphorical) skin in the game.
Calibrate expectations carefully
Now that you have their attention, just remember that in every step in the project you need to be aware of and manage their expectations.
If you don’t manage their expectations, here’s what will happen: Your investment will be a great success. It’ll pay for itself immediately and then go on to triple your nonprofit’s income. You call the trustees (or CEO), ready to celebrate, and they tell you that they’re actually quite disappointed because they were expecting their income to quadruple. And you’re fired.
There is no consolation for the salesperson under these circumstances. If the nonprofit’s expectation was indeed to have its income quadrupled, then the salesperson should have found out early in the process and recalibrated.
It’s not important to do well. It’s important to do better than you were expected to do. So you always need to be on top of your nonprofit’s thinking to ensure that expectations are always lower than the actual results.
And I don’t think it’s at all cynical to put the point that way: the trustees want you to do better than they expect. But that can’t happen unless you are in explicit, constant agreement with them as to what to expect.
One final thing. Remember that…
Overinvestment is a real possibility
There’s a high-end database you can buy that’s really common among medium-sized nonprofits. I won’t name the company who makes it, but I imagine that members of the community will know which one I’m talking about. Anyhow, I’ve seen many of situations where, for a 5-figure annual licensing sum, nonprofits have purchased this database without any real institutional support.
That is, they buy the fancy database, but they have it administered by a part-time data entry clerk who has no training because the nonprofit blew its budget paying for the software itself.
This situation is pretty common, and it’s really embarrassing, so it’s not often discussed. (Of course, it’s great for consultants who want to come in and help, since chances are the nonprofit has been recording data meticulously without any idea of how to use it, so it’s easy to come up with a few quick but terribly illuminating database queries.)
So remember that overinvestment is a possibility when you consider persuading a nonprofit to invest more heavily in something, especially if it has to do with fundraising. If the organization doesn’t have the ancillary funding to support it, or if there is no stakeholder behavior to support it, the investment will be a waste of money.